Swedish bank lures credit-hungry UK clients

Sweden's Handelsbanken is opening a new UK branch every eighth day, securing its place not only in British borrowers' hearts, but reintroducing high street banking in an industry laid to waste by call centres.

Swedish bank lures credit-hungry UK clients

As Handelsbanken recently published its second-quarter profit increase of 7 percent, the bank continues to woo customers – not with aloof promises of Swedish efficiency, but by employing local staff at local branches to make local decisions.

“While our Swedish heritage has some positive associations, we do not choose to focus on this in our marketing, since our model is all about local banking,” spokeswoman Cecilia Egeby told The Local. “We do not have call centres and business decisions are taken at branch level, so that our customers can benefit from swift responses.”

Halifax branch manager Angela Dowd said that British banking had been centralized and automated to the point not only of anonymity, but to the point of losing potentially valuable customers.

“It is entirely ironic that it is just the simple things that are really important to customers, like calling your local manager or walking into your branch, that the other banks can’t seem to provide,” she told The Local, adding that old-school high street banking had become rarer in the past decade or so.

“It’s definitively a niche market in how Handelsbanken presents their business model,” said Dowd, who has worked for the Swedish bankers for seven years. While she once upon a time would have to do an introductory preamble to explain what bank she worked for, Dowd said many new customers are now aware of the brand.

“Although they often at first pronounce it Handels Bank, rather than Handelsbanken,” she said.

The bank’s business model is also based on greater liberty for the branch staff, not only because they don’t have to chase targets, but because they have been empowered to make decisions on the ground.

“We operate without sales targets or bonuses,” central office spokeswoman Egeby explained. “And our branch staff tailors the bank’s products and services to meet each individual customer’s needs.”

For manager Angela Dowd in Halifax, this means being able to take more into account than a credit rating churned out by a computer programme, allowing her a certain degree of freedom in whom she says yes to. And if the answer is, after all, a no, it’s a no explained to the customer in person and politely.

“Other banks miss the nuances around the edges that contribute to a lending decision,” said Dowd, who takes a more rounded approach to her customers. “Some of that is market perception, knowledge of that particular customer or business, and what you hear on the ground… whom you should do business with, and whom you’re best to avoid.”

While the grapevine or gossip down the pub may to some seem like an unreliable source of information in making such important decisions as extending a person’s credit line, the model appears to be both reliable and profitable.

“Our strong credit ratings confirm our consistently prudent approach, and we were recently reconfirmed as Europe’s strongest bank by financial information provider Bloomberg,” Egeby noted.

And it’s not just Bloomberg sounding the gong of success, Handelsbanken even got a widely-publicized nod of support from none other than Sir Mervyn King, then governor of the Bank of England. The Times reported in April that King had advised one particular despondent banking customer to shun all the home-grown alternatives and instead, in the midst of financial crisis gloom, head on over to Handelsbanken, which hadn’t frozen all lending.

“In recent years, our model has also attracted public support from a range of influential figures in Great Britain, which has certainly added to our profile at a national level,” Egeby added, without, very Swedishly of her, dropping any names.

Ann Törnkvist

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Brits in EU risk losing UK bank accounts ‘within weeks’

Some of Britain's biggest banks have begun contacting customers in European Union countries, warning them that their accounts will be closed down within weeks because the cost and complexity of operating without a continuation of pan-European banking rules is too much.

Brits in EU risk losing UK bank accounts 'within weeks'
Lloyds Bank expects to close at least 13,000 accounts. Photo: Lloyds Bank
According to a report in The Times, thousands of Britons who live in Europe face being stripped of their UK bank accounts and credit cards, because of the UK government's failure to agree rules for operating after Brexit. 
Each of the EU's 27 member states has different rules for cross-border bank accounts which will start to apply immediately the UK's transition period ends on 31st December 2020. 
“In some cases, continuing to serve customers would be incredibly complex, extremely expensive and very time-consuming, and simply would not make economic sense,” a source at one British bank told the newspaper. “This is passporting — this is the reality of Brexit.”
If a way is not found to continue pan-European banking rules, or passporting, UK banks will br breaking the law if they don't apply for new banking licenses in each European Union Country. 
Lloyds, Britain’s biggest banking group, began writing to customers in August, warning them that their bank accounts would  close down on December 31.
The bank estimates that 13,000 customers, including those based in Holland, Slovakia, Germany, Ireland, Italy and Portugal, would lose their accounts. 
“If customers have regular deposits into, or payments out of, their account, they will need to make other arrangements before their account is closed,” the bank said. 
Barclays and Coutts have also started contacting customers. 
“In light of the UK leaving the EU at the end of 2020, we continue to review the services we offer to customers within the European Economic Area (EEA), and any impacted customers will be contacted directly,” Barclays said in a statement. “The timings for account closure will depend on the type of product that a customer holds, but we will always give notice to customers.”
“In the event that no alternative to the European Economic Area passporting regime for financial services is agreed between the UK and EU, we have taken the difficult decision to withdraw from offering our services to clients who reside in the EEA,” Coutts said.